The Difference Between our Energy Desires and Reality

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The folks over at Apartment Therapy have a short, but interesting article that points out some methods to reduce energy usage in a home. Many of these methods are not new, and the focus of the article is to reduce energy in each room of a house. Also, as a commenter mentioned at Apartment Therapy, many of these are not renter friendly but are geared more towards home owners.

Two events, one in my personal life and the other in the global news, have brought me to the conclusion that we need and will soon return to the gold standard.

First off, I see investors pouring money into energy “technologies” that are known to be unworkable. To combat this problem, I have been working on a training course and video to teach investors about energy, energy physics, and energy products. I think it is quite conceivable that we are close to an energy revolution that will create the “Rockefellers” of renewable energy and drive technical society to new heights. The market exists, the energy exists, and the technology does not seem out of reach. Achieving this energy revolution is as simple as avoiding investments in totally unworkable energy projects and instead funding the development of energy systems that can work.

In the news, it is the growing instability of unbacked currencies that has caught my attention. It is fair on its face that unbacked exponential monetary systems eventually fail catastrophically. From an engineering point of view it is very simple. The Earth is a spheroid and the unbacked exponential monetary system creates an unbounded exponential function. Plotting these on a graphing calculator reveals that the spheroid stays on the screen and the unbounded exponential function goes off the screen.

The “off the screen” event is of course the failure of the monetary system.

Unlike bridges or aircraft systems, our current monetary systems are not designed for reliability or long term stability. They are negatively stable systems by their nature. One only needs to look at the history of hundreds of unbacked currencies to understand the final outcome of these systems.

I have been very frustrated watching the slow creep toward total failure of today’s currencies and the “investment” in energy “technologies” that are not only fully known not to work, but accelerate our energy decline. I now believe that monetary system failure and doomed energy investments stem from the same lack of understanding some basic rules of nature. Several generations of humans that have been raised without seeing the failure of an unbacked currency. This has created the situation where people now believe that money has power over nature.

This is not true.

Mankind’s ability to print money that works is a result of his success with manipulating the physical world. The reverse is not true. Money cannot be printed that will manipulate the physical world.

At this point, is appears likely that it will take a catastrophic currency failure and massive disruptions to return people to the understanding that moneys lacks power over nature and that nature has power over money.

The gold standard solves all of this. You can consult any “Gold Bug” for a run down of all of the reasons that gold always returns to money as a result of monetary failures. They are all real and true. But there is another advantage of the gold standard that is not frequently discussed. Gold ties the money to the physical world. With gold, there are no “off the screen” events. Gold by its very nature of existing in the physical world, directly ties the monetary and the physical worlds. This has implications that go far beyond what they may seem. Instead of investors needing to learn about energy, energy physics, thermodynamics, and having to speculate about technical societies’ ability to negotiate the problems that arise as the universe ages, just to understand the status of the monetary commitment on the physical world, they can just count the money.

This is indeed a good thing, and solves a lot of problems.

As the instability of today’s monetary systems continues to present itself and crisis ensue, it should be very comforting to all of us that there is a way forward that will eventually solve not only the problems we are seeing with failing monetary systems, but will also help us get to a workable energy future.

LED light bulbs are very good for the environment, and can be very good for the finances as well. The biggest issue with LED bulbs has been the up front cost associated with them. Buying a 60-watt equivalent LED light bulb currently costs around $45 for a Philips Ambient LED bulb, compared to $8 for an 8-pack of GE 60-watt CFL replacements. Mathematically speaking, LED bulbs are typically cheaper to operate per KWh than CFL or even incandescent bulbs. The reason LED bulbs are typically cheaper to operate is because they have a much longer lifespan than CFL or incandescent bulbs, so the need to replace LED bulbs is less, thus off-setting the higher up front cost.

Even when considering the typically cheaper long-term costs of LED bulbs, the up front costs of these bulbs typically scare away potential buyers. In order to increase the adoption of LED bulbs it is crucial to bring down the costs of the bulbs. This is what Lighting Science Group and Dixon Technologies India is hoping to accomplish when they introduce a 60-watt equivalent LED bulb sometime in early 2012. The bulb to be introduced is reported to costs around $15 when it hits shelves. [via Cnet.com]

Up until 1971, the United States was required to back its paper currency with gold, using a system called the gold standard. It was in 1971 that President Nixon implemented several policy changes that would take the United States, and the rest of the world off the gold standard. This profoundly changed the world’s economic practices. No longer were the currencies of the world backed by gold, which meant more currency than gold could exist. This allowed governments to print money on-demand, because having $1 billion dollars of gold and $4 billion dollars of currency no longer mattered. This behavior devalues your money because there is more currency than actual value (gold is the actual value to back up the currency). In the case I mention above, your currency would be worth 25% less than if there were the same amount of currency as gold reserves.

If gold is no longer backing the United States currency, then what is? Oil.

After the final nail was put into the gold standard’s coffin, the only thing backing the currency was the promise of wealth and economic growth. The only way to continually have both economic growth and wealth is through the use of more oil. The availability of cheap, easily abundant oil has spoiled us. It has allowed consistent economic growth for years, but as oil becomes more expensive and more challenging to extract, the ability to grow has also become more challenging. Oil was easy to come by around 1971 so no one thought otherwise. Oil could easily drive the economy and could easily create wealth, because as the fiat currency was inflated the economy grew, thanks to cheap oil. Aside from the short lived oil embargo of 1973, wealth came easily to many because manipulating the currency would allow more wealth. This seems counterintuitive at first glance, but the truth was that printing more money equated to boosting wealth and power. It was as if the currency was not controlled by physics, then came $140.41/barrel oil in 2008. Again, we were reminded that currency manipulation can only go so far.

Since 2008 economic growth has slowed and both wealth and power has diminished. The typical solution, manipulation of the currency, has not worked. It appears that the currency manipulation has actually aggravated the problem, because oil is no longer cheap and easily obtainable. Oil has never really been “cheap” since 2008 and as the economy begins to show signs of life, oil prices increase. It would appear that a growing economy is effected by physical properties, not just man’s counterfeit economical properties. Unlike the counterfeit properties many have grown accustomed to, the physical properties are not changeable. The unchangeable physical properties that dictate our world are over powering the ability to continually print more money, accumulate more debt, and constantly grow an economy.

How can anything continue to exponentially grow? It can’t.

What we are seeing is the reality that oil is the backer of our currency, our live styles, and our power. For a long time the physical properties did not seem clear because obtaining more oil was just a matter of more money. Manipulating the physical properties seemed no different than manipulating the man-made counterfeit economics. Fiat currency systems are based on the idea that wealth, power, and growth will continue for ever. Physics dictates that this is not true. At some point you will reach a plateau, a point were you can no longer pump enough oil out of the ground in order to feed the desire of man to continually expand. Man has become arrogant and has ignored the fact that the ONE thing the entire economical and political system is based on, oil, can not continue to be manipulated. Unlike currencies, oil can not be printed on demand.

As the United States government has grown, so has its influence on our society. An area that the government has had an increasingly large influence is energy. The government influences the type and quantity of energy and fuel sources we use today. In order to finance ethanol producers the federal government has bolstered ethanol, a fuel source, through laws requiring its usage and through subsidies. The strong support from the government has created a market for ethanol, but the large demand for ethanol would probably not exist if the government was not involved. As many of you know ethanol offers a low Energy Returned On Energy Invested (EROEI); corn-based ethanol is roughly 1 and at worst has a negative EROEI. Would a fuel that behaves like an energy converter be in high demand if the market were allowed to decide? I would probably say no. I believe the only thing that has been propping up ethanol is the strong support it has been getting from the federal government. If the government were not supporting ethanol, it would have probably failed by now and we might see other more viable options. Ethanol is not the only case, but ethanol is one of the best examples of why government should not be making energy decisions.

Courtesy of Wikimedia

With promising advancements in fields like algae, diesel engines, and ammonia, it makes no sense for the government to endorse a fuel like ethanol. Many of these more promising advancements are in the background operating quietly, which is a shame. These advancements are competing with every other energy advancement on the market, but they have one major disadvantage, they have not yet gotten the full attention of the U.S. government. Even without the full support of the federal government many of these other energy advances are progressing. Imagine what might be if these energy technologies were only competing against other energy advancements, and not the government too. While the government is out supporting things like ethanol in our gasoline and battery powered electric vehicles, which aggravate our energy problems, individuals are working hard trying to come up with real energy solutions. It amazes me that our country is relying on politicians to dictate our energy future, when the free market should be.

In a free market profit motive is typically at the forefront of the decision-making. This is directly related to EROEI without the people making the decisions even knowing it. That is because typically a good EROEI will equate to a profit. This is the type of force we need driving our energy future, not politicians that are swayed for personal and political reasons. In the end the market will hopefully prevail and the energy advancement of the future will be chosen, but this is only if the federal government doesn’t make it impossible to exist. The federal government should not be making decisive decisions about what energy we should use, but the government can help all possible alternative energy technologies by giving tax incentives. Stopping the subsidizations of alternative energy would be ideal, and instead implementing tax incentives so the free market can have more freedom to work. I believe that in order for new energy advancements to be successful, government must have as little interaction with them as possible. Government is not capable of choosing the correct energy path for our future.

Today I added some information to an older post that is titled, Methods to Reduce Home Energy Usage. I added some information and some links to more information about mini-sub heat pump systems. They are able to heat and/or cool an area and can be added to existing systems much like a window air conditioner or small electric heater.

Electric cars are making headlines all the time theses days. Governments are promoting electric vehicles through tax credits, loan guarantees, and regulation. For many it seems like the age of the electric car is finally coming upon us (especially with vehicles like the Chevy Volt and Nissan Leaf on the market). It seems to me that electric cars are getting disproportional amount of attention when you consider that there are other options for future transportation. I believe that we cannot replace the vast majority of our liquid transportation fuel with electricity.

Why I Believe Liquid Fuel is Still in the Future of Transportation

With electric vehicles usually comes increased electrification of society. Unfortunately, that does not mean that all vehicles can use electricity as their main energy source. There are some major points that I think people overlook when considering electric vehicles:

Large vehicles (like semi-trucks) will still need a liquid fuel to power combustion engines

Electric vehicles take too long to charge, and do not offer long distances

Electrical demand will require more power generation and eventual grid upgrade(s) (smart grid)

In order to power large engine driven equipment like dump trucks, front end loaders, boats, etc…, we will need a liquid fuel source because no technology exists to power these pieces of equipment using electricity (batteries). Perhaps you’re wondering if these pieces of equipment be powered using batteries. The answer is possibly in some cases, but it is unlikely that we will see batteries powering a large barge going to the other side of the world anytime soon. These types of vehicles need to be able to refuel quickly and have the ability to run for a long duration, something that electric vehicles do not currently offer. It is because of these types of heavy duty equipment that we must still use liquid fuels and combustion engines for the foreseeable future. If we must continue to use liquid fuels for the above equipment, why not also use liquid fuel for average cars too?

Can you imagine trying to drive form Michigan to Florida with a Nissan Leaf? With a maximum of roughly 100 miles, it would take a VERY long time to go such a distance (not that it doesn’t already). In order to travel long distances you must have a vehicle that can obtain an energy source very quickly (like getting fuel at a gas station). It is this type of situation that has made Chevy engineers put a combustion engine in their ‘electric vehicle’ (the Chevy Volt). When a person needs to go somewhere, they usually cannot afford to wait around for several hours before traveling. The convenience of electric vehicles is not quite there yet. For many, the distance issue may not be a problem on a daily basis, but on some occasions a different form of transportation will be needed (train, plane, combustion based automobile).

If electric vehicles take off, the demand on the electrical grid to power these vehicles will also take off. If the electrical demand rises, the use of fossil fuels in the power generation sector will have to rise too. I know many electric vehicle advocates promote renewable energy to generate power, but the simple fact is that without a smart grid it is more likely we will see a larger proportion of fossil fuels being used instead. In order to minimize the power loss, and because the current grid doesn’t offer the control to distribute electricity efficiently enough, fossil fuels will continue to see high usage. Fossil fuels have the luxury of being placed closer to high power demand locations than alternative energy installations. The lack of a smart grid will equate to little renewable energy buildup in comparison to what we really need. This is not to say that renewable energy generation won’t increase, but rather that large renewable energy sources will remain few (in comparison to what we need and expect in order to replace fossil fuels and keep up with demand). For example, large wind installations have been delayed or even cancelled due to the lack of quality grid infrastructure (see previous posts, Advancing Wind Power and The Power Grid Unable to Meet Our Needs). I believe that the use of electric vehicles will be fine with our current system for a while, but eventually the need to implement a smart grid system will become a necessity.

Conclusion

Electric vehicles offer only one possible benefit at this time, reducing the use of oil. The likelihood of electric vehicles reducing the use of oil, or even fossil fuels, is pretty low at this point. Electric vehicles use batteries which require the use of rare earth minerals, manufacturing, transportation, and proper disposal. All of these requirements take energy that requires the use of oil and/or fossil fuels. When you factor in the use of fossil fuels on our nations electric grid with the fact that batteries require a fair amount of energy to produce and dispose of, the benefits of these electric vehicles really comes into question. It seems like fossil fuel usage is being moved from the transportation sector to other sectors like manufacturing or electricity generation. With the invention of other storage techniques, increased usage of renewable energy via the smart grid, or a low energy method to produce and handle batteries, we might see more benefits to the electric vehicle. Until these things happen I don’t see how going to buy a Nissan Leaf or a Chevy Volt is going to help reduce fossil fuel usage, reduce oil consumption, or produce fewer greenhouse gas emissions.

Note: The Nissan Leaf and the Chevy Volt are the two mainstream vehicles currently available so I am using them as examples.

Franklin D. Roosevelt (FDR) was one of our Countries biggest proponents of progressive politics. Through government initiatives like The New Deal, which created Social Security, and his Second Bill of Rights, FDR made a major impact on our Country’s social landscape. This new social landscape promised services to individuals as if they were rights. All of these services required additional resources and energy to maintain the social landscape that was being promised by the government. These promises were easily maintained when cheap crude oil was abundant, making continued growth seem eminent. In order to maintain these new rights, our country will be required to have continued energy production growth from limited energy resources, but continued growth can not continue.

As the world continues its plunge towards and beyond Peak Oil, creating a society that is energy efficient is very important. All aspects of society must be considered, even the type of government that is implemented. In a lower energy society anything that can promote hard work, innovation, and self-reliance is very beneficial. I believe the United States Constitution creates the best government structure possible for post-Peak Oil. The Constitution creates a system that does not require continual energy gathering in order to maintain a fully functional, and healthy nation; this is because The Constitution does not promise services to individuals, it only promises freedoms and creates basic structure. Any philosophy that promises services to individuals will require the government to constantly take energy (resources) from one entity to give to another entity, in order to keep the promises made to the people by that government.

In a world where energy prices are high, and conventional crude oil has peaked (according to the 2010 IEA World Energy Outlook, pg. 6) is it possible to continue the never ending resource gathering? The short answer is NO, so how can we expect ideals like FDR’s Second Bill of Rights, and services as rights be sustainable when the only way to maintain these ideals is through continuous gathering of limited resources (i.e. oil, natural gas).

What do you think, do you believe limited resources will shape our government structure? Comment below.

When considering future energy systems, it is very important to separate energy from fuel.

One of the characteristics of petroleum (oil) that makes it a perfect product is the
fact that it is both a “Primary Energy Source” and a “Fuel.” While in the context of
petroleum, these can be considered the same thing, future energy production
and fuel systems require that primary energy sources and fuels be understood as
two different things. This is due to the fact that there are no replacements waiting in the
wings that offer both properties.

Industrial mankind’s largest challenge at this point is replacing the large quantity of energy that
is currently provided by petroleum. Replacing oil as a fuel is also a serious problem, in large
part because the primary energy problem is so serious. If the primary energy problem is “solved,” many fuel solutions are available.

Combining carbon dioxide removed from air and hydrogen split from water using a Fischer–Tropsch like process could produce high quality diesel fuel essentially from air and water. Unfortunately, this process is so energy intense that it is not really considered a viable solution. And it is considered unlikely that we will come up with a primary source of energy so plentiful to make it viable.

So although this system is not viable, it does demonstrate that the most difficult challenge facing Industrial Man is replacing the energy that currently is obtained from fossil fuels.

Because the energy sources available to replace fossil fuel are of lower density and higher cost than fossil fuel, the energy efficiency of the fuel is also very important. Energy efficiency of fuel in this context refers to how much additional energy must be used to obtain, manufacture, use, and dispose of the fuel and its ingredients.

The most useful fuels are hydrocarbon fuel or fuels that are made from hydrogen and carbon. The hydrogen provides the large quantities of energy that are desirable in a fuel, while the carbon provides the storage and handling characteristics that make a fuel like diesel, jet, gasoline, and alcohols so desirable.

Carbon represents two serious challenges in regard to its future use as an ingredient in fuels.

1. Obtaining it:

Obtaining the clean carbon that is necessary to manufacture large quantities
of hydrocarbon fuels is not a trivial task. This is often overlooked as
carbon in the form of CO2 (carbon dioxide) is considered a pollutant at
nearly all points that it is emitted. But closer examination reveals some
problems.

Location: Is the carbon source stationary or moving? Since we are usually talking about a gas, capturing and transporting it is expensive.

Cleanliness: Most processes require clean carbon. If the source produces dirty carbon, cleaning it up can be a very energy intensive and financially expensive proposition.

Timeliness: Is the primary energy available at the same times as all of the other ingredients of the fuel? If not, what is the energy and financial costs of the storage?

2. Disposing of it:

What is the cost of disposing of it? Carbon is increasingly being implicated as a pollutant. This status means that the cost of using it as a component of fuel is likely to increase. It remains to be seen what the carbon taxes of the future will look like, but it looks increasingly likely that there will be clear penalties for emitting carbon into the atmosphere.
Hydrogen is often seen as the fuel that will be used to replace hydrocarbons. Hydrogen has some very serious limitations, including:

Very low density: The density of hydrogen is so low that shipping it as a gas using tanker type equipment that is similar in design to the equipment that is now used to transport petroleum is out of the question. Shipping it as a refrigerated liquid improves this substantially but is energy intense, and creates another challenging set of storage issues.

Flammability: Hydrogen is extremely flammable, it takes very little energy to ignite, and can self ignite under certain circumstances.

Leakage and embrittlement: Hydrogen can leak through many container and plumbing materials, and can make them brittle and dangerous. The most common and cost-effective materials for tanks and plumbing cannot be used.

There is one fuel that can replace hydrocarbons in many of the applications where
the density of hydrogen is too low. This fuel is ammonia. Ammonia is similar in
handling characteristics to propane and it is already commonly used in
industry and agriculture.

The advantages of ammonia in comparison to hydrogen are:

Higher Storage Density

Reduced Flammability

No Carbon.

Ammonia is composed from nitrogen and hydrogen, and therefore can be made using several
known methods from air, water, and large quantities of energy. Since we currently don’t
know how to capture large quantities of renewable energy, most ammonia today is made from natural gas.

Ammonia has some challenges that often disqualify it from consideration as a fuel.

Toxicity: Ammonia is toxic enough that is will likely not be approved for common, untrained use.

Odor: Ammonia has a very strong odor, although this is desirable as it is nature’s defense against the toxicity.

Storage Considerations: Ammonia is a gas at standard atmospheric conditions. Its storage characteristics are similar to propane, with about half the energy density. This disqualifies ammonia for some uses, such as aviation.

While clearly ammonia is not the magic bullet that some seek, a survey of the realities of carbon capture and disposal, photosynthetic efficiency, battery efficiency, and storage density indicate that there are no other fuels that are as ready to be pressed into service as ammonia.

Ammonia is already one of the most commonly used and synthesized chemicals. The most common use is fertilizer, and without ammonia fertilizer there would be large scale starvation. Although ammonia may be too difficult and toxic to handle by untrained operators, it is ready today for professional use.

High-speed rail has the potential to greatly reduce travel times between many major cities, and to move people more efficiently. I am a proponent of high-speed rail (HSR), but I am also cautious about how it is going to be implemented. According to an article in The Wall Street Journal, the freight train railroad companies (like CSX, CN, etc…) are not happy with the idea of putting HSR trains on their freight train tracks.

I started thinking about the logistics of having 200mph trains sharing the same track as 55mph trains, and common sense says its not a great idea. The government is pushing to use current track infrastructure whenever possible because they are hoping to reduce costs and increase time to market. I fully understand the government’s stance on this, and from there viewpoint it does make some sense. The problem is that mixing slow trains and HSR trains on the same track does not make a lot of sense, i mean there is a reason why Europe and Asia have made separate HSR tracks.

If HSR is going to be a large part of our future lives, then building the infrastructure correctly from the beginning is absolutely CRITICAL. I agree with the private companies that sharing rail space with HSR trains will cause bottlenecks and safety issues. Also, if the private rail companies don’t want to share their tracks, then why should they have to? HSR needs its very own infrastructure, separate from freight and slower moving Amtrak trains, otherwise we will end up with a HSR system that isn’t as good as it could be. Also, some valuable information can be found from the Wall Street Journal article here.

What are your thoughts about this topic, and about high-speed rail (HSR)?